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Is Obama’s $50 billion infrastructure proposal just a shot of adrenaline?

The proposal would address “long-overdue” infrastructure investments, but new transportation bill still in limbo.

By Tina Grady Barbaccia, News and Digital Edition Editor

In a “Labor Fest” speech in Milwaukee, President Barack Obama revealed plans to spend at least $50 billion throughout the next six years to rebuild 150,000 miles of roads, lay and maintain 4,000 miles of railways, and restore 150 miles of runways in an effort to give the economy another jumpstart. The plan also would provide tax write-offs for businesses that invest in new equipment, establish an infrastructure bank to “leverage federal dollars, and focus on investments of national and regional significance that often fall through the cracks in the current siloed transportation programs.”

The infrastructure bank would be a departure from the traditional distribution of transportation money through earmarks and state formula-based grants. “I am announcing a new plan for rebuilding and modernizing America’s roads and rails and runways for the long term,” Obama said in his Sept. 6 Labor Day address. “I want America to have the best infrastructure in the world. We used to have the best infrastructure in the world. We can have it again. We are going to make it happen.” (For the text of President Obama’s Sept. 6 speech, go to http://www.whitehouse.gov/the-press-office/2010/09/06/remarks-president-laborfest-milwaukee-wisconsin.)

Obama acknowledged the hard-hit construction sector, pointing out in his remarks that nearly one in five construction workers are unemployed and the fledgling economy has been extremely hard for them.

“I know these are difficult times,” he said in his remarks. “When times are tough, I know it can be easy to give in to cynicism… But I just want everybody here to remember, that’s not who we are. That’s not the country I know. We do not give up. We do not quit. We face down war. We face down depression. We face down great challenges and great threats. We have lit the way for the rest of the world.”

Obama says that the $50 billion infrastructure proposal will provide “long-overdue investments in upgrading our outdated, our inefficient national infrastructure.” He says this includes everything from roads, bridges, dams, and levees to a smart electric grid, broadband Internet, and high-speed rail lines.

In a Sept. 8 address in Parma, Ohio, Obama said that his “most urgent task was to stop a financial meltdown and prevent this recession from becoming a second depression.

“Now, there are still thousands of miles of roads, railways, and runways left to repair and improve,” Obama said in the address. “And engineers, economists, governors, and mayors of every political stripe believe that if we want to compete, we need to rebuild this vital infrastructure… So this week, I’ve proposed a six-year infrastructure plan that would start putting Americans to work right away.”

The National Stone, Sand & Gravel Association (NSSGA) says it is “pleased that the president is acknowledging the important role that both infrastructure plays in the American economy and both the short- and long-term benefits that additional investment would provide.” The organization notes that it plans to consult with its members and coalition allies to advise on messages “to secure more investment in highway infrastructure while helping spur bipartisan passage of a multi-year bill.”

However, NSSGA points out that it’s not clear whether this infrastructure proposal is a preview of a six-year reauthorization of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) highway program that expired Sept. 30 last year and has been through a series of extensions that expire Dec. 31, 2010, or whether it’s “a separate one-shot measure intended to boost highway funding levels.”

Dennis Slater, president of the Association of Equipment Manufacturers (AEM), applauded Obama “for recognizing the vital importance of infrastructure investment to the long-term strength and competitiveness of our country,” but he says the nation really needs — “and what voters want” — is the Administration and Congress to work in partnership right to pass a transportation reauthorization bill.

“While the President’s plan for an Infrastructure Bank and increased capacity in our infrastructure system is an important step, Congress has the opportunity to act now on transportation reauthorization that will result in immediate job creation,” Slater says in a written statement. “We need a strategic vision for modernizing our country’s infrastructure, and leaders with the courage to make it happen. We need Congress to pass a transportation bill, and they need to come together on a robust, multi-faceted, and sustainable way to pay for it, including consideration of a user fee increase. Maybe this is not the most popular policy stance in an election year, but there is no such thing as a safe road built by American workers for free.”

“Accordingly, the $50 billion investment proposed by President Obama must be part of a long-term reauthorization bill and not a stand-alone measure,” Ruane says in a prepared statement. “Infrastructure investment is a proven, cost-effective public policy that provides recurring benefits for decades to come.”

Jim Oberstar, House Transportation and Infrastructure Committee chairman (D-Minn.), is supportive of Obama’s proposal , has also voiced a willingness to work with the president. “The principles outlined by the President are consistent with those put forward by the Committee in the Blueprint for Investment and Reform and the Surface Transportation Authorization Act,” Oberstar says, according NSSGA’s Washington Watch Special Legislative Update.

Following Obama’s announcement, Mica issued a statement saying that he would not support “another tax and spend proposal while billions of transportation and infrastructure funds sit idle.

“I don’t know what planet these people have been living on for the last 18 months,” Mica says in the press statement. “They hijacked the $862 billion so-called stimulus, leaving less than 7 percent in the bill for infrastructure, and they failed to ensure that even this small percentage of funds would be spent expeditiously. Then the Administration undermined their Democrat House Transportation and Infrastructure Committee chairman and killed any chance for a six-year transportation reauthorization bill.”

Mica argues that while it appears that the Obama Administration is doing something about job loss by proposing to spend more money on infrastructure with another stimulus effort, he points out that only 32 percent of the infrastructure funding approved 18 months ago in the first stimulus has been spent.

“Projects continue to be bogged down by bureaucracy and red tape,” Mica continues. “Moving some of the tens of billions of infrastructure dollars that continue to sit idle should be an Administration priority to get people working and stalled major projects moving forward. Unemployment has now climbed to 9.6 percent nationwide. In the hard-hit construction industry, joblessness exceeds an astronomical 30 percent in some states like Florida. (For Mica’s blog on transportation, go to http://www.republicans.transportation.house.gov.)

Associated Equipment Distributors (AED) says it has been “disappointed by the administration’s failure up until this point to focus on long-term infrastructure investment,” but it points out that “the construction industry would almost certainly have been worse off without last year’s stimulus bill. But a one-time infusion of cash is like giving a sick patient a pain killer: It makes them feel better for a short time, but it doesn’t address the underlying problem.”

Obama’s Labor Day announcement suggests, however, that the message may have “finally gotten through,” notes AED in an analysis of the proposal.

“The White House has finally connected jobs, long-term economic growth, and infrastructure investment,” AED says in its analysis. “…The Obama Administration is also now acknowledging the need for a long-term reauthorization and the need to shore up the Highway Trust Fund. That’s great news.”

The $50 billion plan

150,000 of roads

(Enough to circle the world six times)

4,000 miles of railways

(Enough to stretch from coast to coast)

150 miles of runways

Construction industry adds 19,000 jobs

The construction industry added 19,000 jobs in August as a strike that had lowered employment in July ended, but the sector’s 17-percent unemployment rate was the highest August rate ever, according to a new analysis by the Associated General Contractors of America (AGC) of federal employment data. (For the official press release on this from AGC, go to http://www.agc.org/cs/news_media/press_room/press_release?pressrelease.id=657.)

“Construction layoffs in May through July offset modest job gains in March, April, and August, leaving the industry with a tragically high unemployment rate last month,” Ken Simonson, AGC’s chief economist, said in a prepared statement.

Simonson pointed out that the industry’s 17-percent rate was higher even than the 16.5 percent rate a year earlier and far above the unadjusted national rate of 9.5 percent. He noted that industry unemployment rates are not seasonally adjusted and, thus, can be meaningfully compared to the same month in earlier years, but not across months.

“Construction began losing jobs four years ago, more than a year before the rest of the private sector, and the industry remains stuck in neutral at best, nine months after other industries started adding jobs consistently,” Simonson said in the statement.

He said that during the past year, 274,000 construction workers (4.7 percent of the August 2009 total) have lost jobs, spread among all five categories tabulated by the Bureau of Labor Statistics: non-residential specialty trade contractors (123,700 or 5.8 percent), residential specialty trade contractors (63,200 or 4.0 percent), residential building (45,700 or 7.4 percent), non-residential building (31,900 or 4.5 percent), and heavy and civil engineering construction (10,000 or 1.2 percent).

“Construction job losses will resume soon unless Congress and the White House promptly finish work on long-term transportation and water infrastructure spending bills and keep income tax rates from soaring,” said Stephen E. Sandherr, the association’s CEO. “Stopgap funding for transportation doesn’t provide the certainty companies need for hiring. Meanwhile, the prospect of a leap in taxes is deterring private investment.”

Hey Congress, we’re sick of aging roads’

The Transportation Construction Coalition (TCC) and the U.S. Chamber of Commerce-led Americans for Transportation Mobility (ATM), two national groups advocating for significant new investments in transportation improvements, are working together to elevate infrastructure issues on the congressional legislative calendar this year.

The current federal highway/transit investment law, SAFETEA-LU, expired nearly a year ago on Sept. 30, 2009. It has been operating under a series of short-term extensions, the latest through Dec. 31, 2010.

The federal government is the source of nearly 45 percent of all public capital investments in surface transportation.

The two organizations have developed campaign advertising to appeal to the general public with signs asking, “Sick of Aging Roads? — Tell Congress to Act!”

Similar messages have been developed for traffic congestion, transit delays, and unsafe bridges.

Billboard advertisements have been running in South Dakota and South Carolina, and were posted in Illinois, Michigan, Tennessee, Iowa, and Maryland.

As part of the campaign, Rep. James Clyburn (D-S.C.) held a news conference with coalition partners in Columbia, S.C., to mark the ad campaign’s launch in that state.

The ads direct viewers to the Web site www.fasterbettersafer.org, where an action kit, instructions for contacting members of Congress, educational videos, and other materials about the highway/transit bill are available.

The TCC, co-chaired by the American Road & Transportation Builders Association (ARTBA) and the Associated General Contractors (AGC) of America, is comprised of 29 national construction groups and labor unions with a direct market stake in federal transportation programs.

The ATM is a nationwide effort by business, labor, transportation organizations, and concerned citizens to advocate for increased federal investment in the nation’s aging and overburdened transportation system.